AT&T to Buy T-Mobile USA for $39 Billion

Moderator

AT&T announced on Sunday that it had agreed to buy T-Mobile USA from Deutsche Telekom for $39 billion, in a deal that would create the largest wireless carrier in the nation and promised to reshape the industry.

In my opinion this is really bad news for consumers. I had a T-mobile plan for years and enjoyed the fact that I could get cell service for $10 less per month than the major carriers. Ultimately this will make an AT&T, Verizon, powerhouse duopoly that no one, including Sprint can even challenge. Hopefully it doesn't make it through justice or the FCC.

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I'm glad I'm with US Cellular and have every intention of sticking with them, but I'm always worried they'll be the next target for takeover. (Presumably by Verizon.)

If the FCC and/or DOJ have any sense in them at all, they'll reject this. As my instant message status currently says, "When a merger is announced and the entire country collectively groans at how awful it will be, that's a sign that the Justice Department should reject it. (I'm looking at you, AT&T and T-Mobile.)"

Moderator

But even as public interest groups raise concerns about a market dominated by three markets, commentators are already saying that the third cellco, Sprint, may be doomed. A blog post in the Wall Street Journal gave Sprint the following advice: “Sprint shares are sinking badly, down about 14% in recent trading. Sprint has a two paths it can take: Bulk up or sell out.”

One article in the LA Times suggested that Verizon might respond to the acquisition by buying Sprint...

...Competition concerns may not matter because mergers are approved even when the market is harmed. There were valid competition concerns in Comcast’s acquisition of NBC.

The FCC’s record is especially poor. The FCC cannot be trusted to enforce merger conditions, Susan Crawford noted: “Experience with prior mergers for which FCC exacted conditions demonstrates that DOJ should be involved in enforcement. Examples include failures to enforce fiber commitments in SBC-Pacific Telesis, SBC-SNET, and NYNEX-Bell Atlantic; competition commitments in SBC-Ameritech, Bell Atlantic-GTE (Verizon; and promised cost savings in AT&T-BellSouth.”